As the operating environment continued to challenge not-for-profit providers, Moody's Investors Service last quarter downgraded 32% more hospital debt than it upgraded.
The ratings agency downgraded a total of $2.78 billion in hospital debt compared with $2.11 billion in debt that it upgraded, according to a news release (PDF). Twelve issuers were downgraded compared with nine that were upgraded.
“The increased proportion of downgrades were driven by the continued slow economic recovery, increasing pressure on state budgets, and a large and growing federal deficit,” said Carrie Sheffield, author of the Moody's report, in the release. “The deficit problem may lead to reductions in Medicare and Medicaid, which translate into weak volumes and revenue declines for hospitals.”